Election jitters apply brakes on new vehicle sales
Toyota Motor Corporation unveils a brand new electric vehicle “Izoa EV” during a press preview in Shanghai, China on April 16, 2019. PHOTO | The Yomiuri Shimbun via AFP
Sales of new motor vehicles dropped marginally in the nine months ended September, with the slowdown linked to the economic uncertainty in the context of the recent General Election.
Formal dealers including Isuzu East Africa, Toyota Kenya, and Simba Corp sold a total of 9,868 units in the review period, according to data from the Kenya Motor Industry Association (KMI). This marked a 1.75 percent drop from 10,044 units the year before.
“The August election jitters contributed to the marginal decline,” said Rita Kavashe, the chief executive of Isuzu.
“Given the peaceful election and timely completion of the Supreme Court case following the disputed election, end-year sales are likely to close at the same level as last year.”
The industry sold 14,250 units in the year ended December 2021. Ms Kavashe noted that sales to the government have slowed down as the new administration is still being established. The process of appointing Cabinet secretaries is ongoing and there are plans to cut government spending by Sh300 billion.
The State is the biggest single buyer of new vehicles, accounting for over a fifth of total sales. Ms Kavashe said the industry is witnessing a good recovery in terms of demand from retail and corporate clients. She added that delayed payment of pending bills by county governments remains a challenge for the new vehicle dealers.
While the industry recorded a marginal decline in orders in the nine months to September, there were divergences in performance as some players recorded higher sales and grew their market share.
Sales of Isuzu, for instance, rose to 4,451 from 4,104 and the dealer raised its market share by 4.2 percentage points to 45.1 percent.
The company announced it will sell 159 units of a special edition of its Isuzu D-Max pick-ups next year as part of a partnership with its brand ambassador and marathon champion Eliud Kipchoge.
The second-largest dealer, Toyota Kenya, grew its sales by a small margin to 2,240 from 2,386. Its market share however declined slightly to 22.7 percent from 23.8 percent.
Simba Corp was among the dealers whose sales dropped, with its orders receding to 1,063 from 1,243. Its market share subsequently fell to 10.8 percent from 12.4 percent.
The industry is yet to match the recent sales peak of 19,253 units recorded in 2015. The government has been rolling out a series of incentives to encourage the growth of the local vehicle assembly business in a bid to create local jobs and skills besides accelerating technology adoption. The incentives are mostly in the form of lower taxes and exemptions besides a ban on the imports of most types of second-hand commercial vehicles.
